Trump attacks Amazon again on state taxes, USPS delivery

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“I have stated my concerns with Amazon long before the Election,” Trump tweeted. “Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” (AP Photo/Evan Vucci, File)

President Donald Trump on Thursday said his concerns with Amazon.com Inc. predate his election, a day after a report that he’s “obsessed” with regulating it.

“I have stated my concerns with Amazon long before the Election,” Trump tweeted. “Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”

Amazon shares erased a premarket gain of as much as 1.7 percent after the tweet. Amazon declined to comment on Trump’s tweet.

The company’s market value plunged $53 billion Wednesday after Axios reported Trump wants to impose further regulations on the company. White House press secretary Sarah Huckabee Sanders said later Wednesday the administration isn’t considering any changes in policy directed at the company.

Sales tax

Trump has a long history of animosity toward Amazon Chief Executive Officer Jeff Bezos, who also owns the Washington Post newspaper, and the president has aired these complaints before. Last summer Trump referred to the “AmazonWashingtonPost” as the “guardian of Amazon not paying internet taxes (which they should.)”

Amazon does, in fact, collect sales tax in every state that has one.

There is one big loophole, however: Amazon’s policies don’t apply to third-party merchants selling goods through its website, and many of those transactions remain untaxed. Such sales make up about half of the company’s volume. Amazon has said it’s up to the sellers to collect any taxes and many don’t.

“The president has talked about the need to have tax parity between online retailers and brick-and-mortar retailers,” White House spokesman Raj Shah said on Fox News on Thursday. “Right now, there is no internet sales tax, and as a result, companies like Amazon can buy and sell goods without having to pay basic retail taxes.”

Postal service

In late 2017, Trump said Amazon should pay “much more” in fees for delivery.

Amazon regularly uses the Postal Service to complete what’s called the “last mile” of delivery, with letter carriers dropping off packages at some 150 million residences and businesses daily. It has a network of more than 20 “sort centers” where customer packages are sorted by zip code, stacked on pallets and delivered to post offices for the final leg of delivery.

The mail service is independently operated and strikes confidential deals with retailers. Analysts have said that Amazon pays USPS about half of what it would pay UPS or FedEx.

“At the end of the day, the standard rule, the standard of care, is: Are consumers better off? And ultimately I think consumers are better off with Amazon and I think that will prevail with this debate,” said Gene Munster, managing partner at Loup Ventures, in an interview on Bloomberg TV.